Allianz Group, Europe’s largest insurer and asset manager, saw operating profit in the third quarter rise 18.2 percent to 2.9 billion euros, driven by contributions from all business segments. The Life and Health segment produced the strongest results with contributions from all large operating entities.

Net income attributable to shareholders climbed 36.5 percent in the quarter to 1.9 billion euros due partly to better performance across its business segments. Property and Casualty insurance saw robust internal revenue growth of 3.1 percent when adjusted for currency and consolidation effects.

“Efforts to develop our business in a very difficult environment are paying off,” said Dieter Wemmer, chief financial officer of Allianz SE. “We’re seeing sustainable profitable growth in many businesses. Improvements from our Renewal Agenda are bearing fruit and keeping us on track to reach our operating profit target for the full year of 10.5 billion euros, give or take 500 million euros.”

Key performance indicators also improved in the quarter, with the combined ratio strengthening to 93.5 percent from 94.1 percent one year ago and the cost-income ratio in asset management improving to 60.8 percent from 63.3 percent. In the life segment, the new business margin weakened by 0.3 percentage points to 2.8 percent on the year but improved from the second quarter by nearly the same amount despite a decline in market rates.

9M 2016 overview

Total revenues decreased by 3.2 percent to 92.4 billion euros for the first nine months of 2016. Operating profit eased 1.7 percent to 8.0 billion euros, driven by the Property and Casualty segment, and, to a lesser extent, Asset Management. The Life and Health segment, however, posted an increase in operating profit. The non-operating result was impacted by a lower investment result and the classification of the South Korean business as held for sale. Overall, net income attributable to shareholders was 5.1 billion euros, down 1.1 percent from the first nine months of 2015.

3Q revenues up 0.5%

In the third quarter of 2016, total revenues edged higher to 27.7 (previous year: 27.5) billion euros. A decline in revenues from the Asset Management segment was offset by revenue growth in the Life and Health segment.

3Q operating profit up 18.2% to € 2.9bn

Operating profit grew 18.2 percent to 2.9 billion euros in the third quarter, largely due to a higher investment margin in the Life and Health segment. The Property and Casualty segment delivered a 4.3 percent rise in operating profit due to stronger underwriting and investment results, while Asset Management operating profit rose 0.5 percent.

3Q net income up 36.5%

Lower impairments and higher realized gains led to an improvement in the non-operating result. Net income attributable to shareholders increased by 36.5 percent to 1.9 billion euros in the third quarter of the year. Basic Earnings per Share (EPS) rose to 4.08 (2.99) euros.

Annualized RoE 12.4% in 9M

Annualized Return on Equity (RoE) was 12.4 percent for the first nine months of the year 2016 (full year 2015: 12.5 percent). Annualized figures are not a forecast for full-year numbers.

Solvency II capitalization ratio 186% at 30.9.2016

Solvency II capitalization ratio remained robust at 186 percent at the end of the third quarter, demonstrating the resilience of the group despite the current low interest rate environment.

9M 2016 overview

In the first nine months of 2016, gross premiums written held mostly steady at 40.4 (40.7) billion euros. Adjusted for foreign exchange and consolidation effects, internal growth remained strong at 3.1 percent, mostly due to positive developments in Turkey, Germany and Argentina driving the increase. Operating profit fell 9.9 percent to 3.9 billion euros compared to the first nine months of 2015, partly due to high claims from natural catastrophes in the second quarter and lower investment income. In addition, the year-ago period was supported by the net gain from the sale of the Fireman’s Fund personal insurance business. The combined ratio was 94.4 (94.1) percent.

3Q gross premiums written hold steady

Gross premiums written held steady at 11.5 billion euros in the third quarter in the segment. Adjusted for foreign exchange and consolidation effects, internal growth remained strong at 3.1 percent, mostly due to positive developments in Turkey, Allianz Worldwide Partners and Australia. Of that, price and volume effects contributed 1.6 percent and 1.5 percent, respectively.

3Q combined ratio improves to 93.5%

Operating profit increased by 4.3 percent to 1.4 billion euros in the third quarter in the segment. The underwriting result benefited from a benign natural catastrophe environment and lower large losses. The investment result also improved after an unfavorable foreign currency result net of hedges in the third quarter of 2015. This positive effect was partially offset by a lower net interest result. The combined ratio improved to 93.5 (94.1) percent.

3Q management assessment

“The rate of internal growth at over 3 percent is a clear signal that the Property and Casualty business is robust,” said Dieter Wemmer, chief financial officer of Allianz SE.

9M 2016 overview

In Life and Health insurance, operating profit for the first nine months of 2016 increased by 13.8 percent to 3.1 billion euros. Statutory premiums decreased by 4.7 percent to 47.5 billion euros. The targeted shift toward capital-efficient products lifted the new business margin to 2.6 (1.9) percent. As a result, the value of new business (VNB) increased by 29.2 percent to 1.0 billion euros compared to the first nine months of 2015.

3Q statutory premiums up 1.6%

Statutory premiums in the third quarter increased 1.6 percent to 14.5 (14.3) billion euros, driven by higher sales of capital-efficient products in Germany and the United States. This was partially offset by lower unit-linked premiums in Italy and Taiwan. Adjusted for foreign exchange and consolidation effects, statutory premiums increased by 1.5 percent.

3Q operating profit rises 53% to € 1.1bn

Operating profit increased by 53.0 percent to 1.1 billion euros from the third quarter of 2015 mainly due to higher investment margins in the United States and France. In addition, operating profit in the third quarter of 2015 was burdened by loss recognition in South Korea.

VNB €318mn and NBM 2.8% in 3Q

The value of new business (VNB) decreased by 1.0 percent to 318 million euros in the third quarter of 2016 compared to year-ago. Premiums shifted to capital-efficient products due to changes in product strategy, but unfavorable economic conditions in U.S. and European markets had a negative effect. The new business margin decreased by 0.3 percentage points to 2.8 percent from one year ago, mainly as a result of lower interest rates, but increased when compared to the second quarter of 2016.

3Q management assessment

“We have enjoyed a great success shifting our business mix toward capital efficient products as reflected in a robust new business margin of 2.8 percent,” said Dieter Wemmer. “Life results benefited from a stronger investment margin in the quarter despite the historically low interest rates seen today.”

Sub-Überschrift

Asset Management: PIMCO attracts first positive net flows in over 3 years

9M 2016 overview

In Asset Management, third-party net outflows and negative foreign currency translation effects were more than offset by a strong positive market return and the acquisition of Rogge Global Partners, which together led to a 4.0 percent increase in third-party assets under management (AuM) from December 31, 2015. Operating profit decreased by 5.8 percent to 1.6 billion euros in the first nine months of 2016, mainly as a result of lower margins and lower average third-party AuM, leading to declined AuM driven revenues. In addition, a decrease of performance fees also had a negative impact on the operating profit. Lower operating expenses partially offset the operating revenue decline. The cost-income ratio (CIR) improved to 64.2 (65.1) percent.

3Q operating profit € 604mn

Operating profit edged slightly higher to 604 (600) million euros. Lower operating expenses more than offset a decrease in third-party AuM-driven revenues and lower performance fees. When compared to the second quarter of this year, operating profit grew 21.2 percent.

CIR at 60.8% in 3Q

The cost-income ratio (CIR) improved by 2.5 percentage points to 60.8 percent from the year-earlier quarter, mainly due to a decrease in personnel expenses and restructuring expenses. Both PIMCO and Allianz Global Investors contributed to the improvement, with the latter reaching its most efficient level of operations since the set-up of its current structure in 2012.

3P net inflows at € 6bn in 3Q

Compared to June 30, 2016, third-party AuM grew by 20 billion euros to 1,327 billion euros as a result of positive market effects and third-party net inflows, partly offset by negative foreign currency translation effects. PIMCO saw positive third-party net flows of 4.7 billion euros, the first since the second quarter of 2013. Allianz Global Investors saw positive third-party net flows of 1.5 billion euros, making it the fourteenth quarter out of fifteen to see positive net flows.

﻿Download

The quarterly figures regarding the net assets, financial position and results of operations have been prepared in conformity with International Financial Reporting Standards. This Quarterly Earnings Release is not an Interim Financial Report within the meaning of International Accounting Standard (IAS) 34.

This is a translation of the German Quarterly Earnings Release of the Allianz Group. In case of any divergences, the German original is binding.

As with all content published on this site, these statements are subject to our Forward Looking Statement disclaimer.